Amazon AWS segment now has an annualized revenue run rate of more than $105B

Yesterday, Amazon.com reported its financial results for the second quarter ending June 30, 2024. Overall, the company had revenue of $148.0 billion, up 10% year-over-year, and net income increased to $13.5 billion, up from $6.7 billion in the second quarter of 2023. While Amazon's retail business posted modest single-digit growth, the AWS segment posted an impressive 19% growth year-over-year. The AWS segment revenue was $26.3 billion, and operating income was $9.3 billion, up from $5.4 billion in the second quarter of 2023.

With these stellar results, AWS now has an annualized revenue run rate (ARRR) of more than $105 billion. Annualized revenue refers to an estimate of the total revenue a business generates over a year. It’s calculated based on less than one year’s worth of data, so it provides an approximation of the total income for the year. In this case, Amazon's quarterly revenue, $26.3 billion, is multiplied by four to reach its $105 bn ARRR figure.

During the earnings call, Amazon's CFO said that organizations are now turning their attention to newer initiatives, bringing more workloads to the cloud, restarting or accelerating existing migrations from on-premises to the cloud, and taking advantage of the power of generative AI, which resulted in impressive numbers for AWS.

AWS segment results are in line with other major cloud providers as well. Recently, Microsoft and Google reported similar solid growth from their cloud businesses. Jamin Ball from Altimeter tweeted the following table comparing the results of all three big cloud players.

Andy Jassy, Amazon President & CEO, mentioned in the earnings report that they are seeing continued reacceleration in AWS growth and said the following:

“As companies continue to modernize their infrastructure and move to the cloud while also leveraging new Generative AI opportunities, AWS continues to be customers' top choice, as we have much broader functionality, superior security and operational performance, a larger partner ecosystem, and AI capabilities like SageMaker for model builders, Bedrock for those leveraging frontier models, Trainium for those where the cost of compute for training and inference matters, and Q for those wanting the most capable GenAI assistant for not just coding, but also software development and business integration.”

AWS continues to beat expectations, achieving impressive growth despite its already massive scale. This reaffirms its dominant position in the cloud market and highlights the sustained demand for cloud services.

Source: Amazon (PDF)